MarketWatch’s top 10 stories, Dec. 10–14

With only 17 days to go before the U.S. arrives at fiscal doom, references to “Thelma & Louise” have been popping up with greater frequency in the media. That isn’t in itself surprising because, frankly, what better way is there to talk about falling off a cliff than relating it to a movie where two beautiful women, rather than face justice, drive off the edge?

MGM

Fortunately, most pundits seem to have faith that a deal will be brokered in Washington and America’s blue convertible will brake in time.

“Winston Churchill famously said, ‘You can always count on Americans to do the right thing — after they have tried everything else.’ This certainly seems to be the case with the fiscal cliff,” Ethan Harris, an analyst at Bank of America Merrill Lynch, said in a recent report.

Still, all the uncertainty is taking a toll on the markets, with all major indexes closing lower this week.

At press time, 27 people, including 20 children, are dead in a shooting Friday at an elementary school in Newtown, Conn. The alleged gunman, Adam Lanza, is reportedly among the dead. Lanza’s mother was a teacher at the Sandy Hook Elementary School, and reports suggest he may have targeted her classroom. In a press conference at the White House, President Obama said the country must unite to “take meaningful action to prevent more tragedies like this, regardless of the politics.” See full story: 20 children dead in Connecticut school shooting.

Have Republicans forfeited cliff battle?

President Obama and House Speaker Boehner locked horns, in public and in private, on how to avert the fiscal cliff — the term given the confluence tax hikes and spending cuts set to take effect without legislative action by the end of the year. The two sides traded at least two proposals, but it’s unclear whether any progress is being made — even if, as MarketWatch’s Rex Nutting argues, Republicans have already conceded two cherished ideals. Full column: Republicans have surrendered on fiscal cliff.

The Federal Reserve this week set out unemployment and inflation levels that must be in place before it would contemplate higher interest rates. At the same time, the Fed announced a new $45 billion bond-buying program in fresh action to keep the recovery going in a languishing jobs market. But it was the thresholds that surprised Fed watchers. See: Fed sets jobless, inflation targets; to buy bonds.

Chinese economy picks up pace

Business conditions for Chinese manufacturers improved further in December, pushing an initial reading of HSBC’s purchasing-managers index to a 14-month high. HSBC’s “flash” manufacturing PMI for December — a closely watched indicator of the world’s second-largest economy — came in at 50.9, compared with a final print of 50.5 for November and 49.5 for October. See: China manufacturing data show further improvement.

South Korea is odd man out in Vanguard shift

This fall, investment giant Vanguard Group made a relatively arcane business decision, switching the benchmark tracked by one of its most popular exchange-traded funds, the Vanguard MSCI Emerging Markets ETF, from MSCI’s version to that of rival FTSE. The company said it was simply looking to lower its licensing fees. But because those two index providers classify emerging markets differently, Korea, one of the biggest emerging-markets success stories of the past decade with an average annual return of 13%, could be bumped from the fund’s portfolio. See: Vanguard investors fear Korea’s vanishing act.

What map flap says about Apple and Google

The battle between Apple iOS and Google Android operating systems is ultimately one of philosophy, about whether it’s better to control the hardware and the software in mobile devices or only the latter. The ultimate winner will be chosen by consumers, and the battle has many years left to run. But with the release to positive reviews of Google‘s
GOOG, -1.72%
map app for iPhone and iPad this week, the search giant has shown the strength of its effort to prioritize software development. Ironically, this successful effort comes with a nod to Apple.
AAPL, -1.92%See full column by John Shinal: Map flap exposes soft spot in Apple strategy.

Will Google and Groupon get together yet?

If you’re familiar with Groupon
GRPN, -1.79%
and over-the-top pop rock from the late 1960s, you probably can’t help but think about the Blood, Sweat & Tears song “Spinning Wheel.” If that earworm of an opening line “What goes up/Must come down” has taken over your mind, don’t feel bad. Groupon’s shares have been volatile this week on a rumor that Google was considering revisiting an acquisition of Groupon. See: Rough ride for Groupon’s spinning wheel.

Well-known but unloved dividend payers

For bargain hunters who would rather earn income from stocks than bonds, MarketWatch searched for reliable dividend-paying companies whose shares are bruised and whose balance sheets aren’t too debt-laden (total debt is less than 60% of total capital on the books). McDonald’s
MCD, -0.64%
Intel
INTC, -1.79%
and Microsoft
MSFT, -1.70%
were among a handful of companies that scaled this high bar. See: Three unloved dividend stocks to watch in 2013.

Joblessness below pre-Sandy levels

The number of people who applied for new U.S. unemployment benefits last week fell below pre-Sandy levels and hovered near a four-year low. Initial jobless claims declined by 29,000 to a seasonally adjusted 343,000 in the week ended Dec. 8, the Labor Department said Thursday. Claims from two weeks ago were revised upward to 372,000 from 370,000. Weekly claims data have been extremely volatile over the past month because of disruptions caused by Hurricane Sandy and the holiday season may now be introducing distortions, economists caution. See: Jobless claims drop below pre-Sandy levels.

New Tigers: What Ghana and Uganda offer the brave investor

Ghana and Uganda exemplify the seismic changes under way across large parts of sub-Saharan Africa. Extended periods of peace, stable political structures, ubiquitous mobile-phone networks and the rise of mobile technology have transformed their societies. The discovery of oil in both countries holds the promise of huge profits. These changes have helped spark the birth of a middle class eager to spend its hard-earned money on the trappings of modern society. The two countries are profiled in the latest installment of MarketWatch’s The New Tigers series. See: Ghana, Uganda offer brave investors risks, rewards.

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